A draft of a federal inspector general's report covering fiscal year 2006 says Medicare actually didn't detect about $2.8 billion in improper spending, The New York Times said Thursday.
The report said more than one-third of spending for wheelchairs and other medical equipment in 2006 was improper. Medicare officials told the U.S. Congress the cost of fraud in medical equipment that year had been slashed to $700 million, the report said.
The report accuses Medicare officials of telling outside auditors to skip government policies that would have accurately measured fraud.
U.S. Sen, Charles Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee who had praised the overseeing Centers for Medicare and Medicaid Services for reducing improper expenditures, called the report "outrageous," the Times said. Some lawmakers said the inspector general's findings suggested fraud.
A Medicare spokesman said the agency agreed its reported level of improper spending should have been higher but said the $2.8 billion figure is unsubstantiated.